Mandatory CSR spend issue back in focus
The Ministry of Corporate Affairs has once again tweaked its corporate social responsibility (CSR) clause to strengthen its provisos, CNBC TV-18 reporetd on Thursday.
The Ministry of Corporate Affairs has once again tweaked its corporate social responsibility (CSR) clause to strengthen its provisos, CNBC TV-18 reporetd on Thursday.
The reworked clause is in the draft Companies Bill note for the Cabinet.
The draft note has dropped the word 'endeavour' in its CSR clause, according to a CNBC TV-18 report.
The fresh clause decrees that companies 'shall ensure' 2% of net profit (NP) is spent on CSR.
The move is after the House Panel on Finance objected to the term 'endeavour'.
Yashwant Sinha.
The Ministry of Corporate Affairs sources said that tightened CSR provisos are due to the House Panel's objections
However, MCA sources told CNBC TV-18 that CSR will not be made mandatory and the 'explanation' clause will be retained.
BJP leader Yashwant Sinha sais that it shold be clearly mentioned why companies are investing in CSR.
"I am happy that the MCA has dropped the term 'endeavour' from the Comapanies Bill. I am hopeful that the Cabinet will approve the new CSR provision," Sinha told CNBC TV-18.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
also read
Centre mulling standard reporting norms on CSR for PSUs
At present, the performance of public sector undertakings with regard to CSR activities and sustainability is evaluated by the DPE.
India Inc to pump in Rs 14,000 cr for CSR in 2014-15: FM Jaitley
Under the new Companies Act, certain class of profitable companies are required to spend at least two percent of their three-year average annual net profit for CSR activities.
Govt to take up Companies Bill in Budget Session: Moily
Under the CSR provisions for PSUs, a company with a net profit of less than 100 crore will have to spend 3-5 percent of it on the CSR.